Digital drive sees News Corp profits surge
News Corp says transitioning its subscribers to digital platforms helped enable the publishing giant to realise a signficant lift in profits, with its second quarter earnings the best in seven years.
And it is Australia which is leading the field, with digital subscribers up by 30 per cent in a year, with 738,000 Australians now subscribing to News for online newspapers, compared to 566,000 a year ago. Sadly, for the print industry, the transition to online means the end of much print, with News closing more than 100 printed newspapers during 2020.
Robert Thompson, Group CEO, said, "In Australia, we were fortunately ahead of the curve in transitioning many of our local and regional print properties to digital platforms, which helped them weather the storm of lockdown.”
News closed some 112 print titles, mainly regional and community newspapers, in the early stages of lockdown, with a third of them transitioning to digital platforms and the rest disappearing. The move came less than four years after News bought the titles from APN, and followed the collapse of talks offload them to Australian Community Media.
Overall, News more than doubled its net profit to $US261m ($342m) in the second quarter, up from $US10m, but its news businesses struggled with weak print advertising. EBITDA was “steady” at US$66m for the news division, which includes The Australian, the Daily Telegraph and the Herald Sun, as well as The Times of London, and the New York Post, but revenue plunged by 30 per cent from $US811m to $US573m. Print ad revenue declined, while ads in digital newspapers grew.
News Corp's overall revenue of $US2.41bn ($3.1bn) for the second quarter was up by 10 per cent on the $US2.12bn in the previous quarter.
Despite the hit to newspaper print advertsiing, News is currently building a new greenfield print site for its Victoria business, which is scheudled to come in Q2 this year, and which will print titles for not only News, but also Nine, including The Age and the AFR, and for ACM, which will close its Ballarat print site once the new News site opens.